Today we're having an honest conversation about Buy Now, Pay Later (BNPL). The ease of use of BNPL products has been associated with increased spending and could drive negative consumer consequences, prompting US regulatory agencies to look deeper at this rapidly growing space. Last December, the CFPB launched an investigation into the business practices in BNPL sector due to mounting concerns about “accumulating debt, regulatory arbitrage, and data harvesting in a consumer credit market already quickly changing with technology.” Then the bureau issued orders to five BNPL lenders, asking for detailed information on the activities and risks inherent to their lending practices. Director Rohit Chopra ordered Affirm, Afterpay, Klarna, PayPal, and Zip to submit information so that the bureau can report to the public about industry practices and risks. Now the report is out, and we're exploring it in today's episode with my guest Marshall Lux. With a credit risk experience spanning over three decades, including serving as JPMorgan Chase’s Chief Risk Officer of consumer products during the global financial crisis, Marshall supports enhanced regulatory oversight in the BNPL space. He wrote a paper on the risks associated with BNPL, and on what regulation could look like in this space. You can check it out here: https://www.hks.harvard.edu/sites/default/files/centers/mrcbg/files/182_AWP_final.pdf To read the transcript of our conversation, please go to Tearsheet.co.